omesti

 
 

In post-coup election, Thai rice, rubber farmers rethink old divide

KHON KAEN/SONGKHLA (Thailand), March 21 — In the rice-growing heartland of Thailand’s northeast, Kamol Suanpanya, 80, meets in the off season with fellow farmers at a community centre, where they discuss Sunday’s election, the first after…


PNB expects Bursa revival once market clarity is restored

KUALA LUMPUR, March 21 — Permodalan Nasional Berhad (PNB) expect the local stock market to improve when the government provides a clear indication of its economic direction. In a Bloomberg report today, PNB chief executive officer Datuk Abdul…


BNM’s monetary stance expected to tilt towards easing, Kenanga says

KUALA LUMPUR, March 21 — With the US Federal Reserve (US Fed) having signalled that there would be no interest rate hikes this year due to slower economic growth, Bank Negara Malaysia’s (BNM) monetary stance is expected to tilt towards easing,…


ICAEW: Malaysia’s GDP growth to moderate in 2019, forecast at 4.4%

KUALA LUMPUR: Malaysia’s gross domestic product (GDP) is expected to grow at 4.4% in 2019 on the back of domestic demand, amidst a difficult export environment, according to the Institute of Chartered Accountants in England and Wales’ (ICAEW) latest Economic Insight: South-East Asia report.

It said Malaysia’s domestic demand is expected to cushion against challenges of moderate export growth amid increased trade protectionism and slower Chinese import demand. Exports are expected to remain under pressure, with the increase in trade protectionism over the past year unlikely to change any time soon.

Economies in the South-East Asian region started the year on a soft note, as a result of the weakness in global economic activity late 2018. Malaysia was the only country to record positive annual growth for exports, as regional figures tumbled in December 2018; contracting 2.3% on the year following a weak outcome (2.2%) in November. Data indicates further weakness ahead in the manufacturing and export sectors as Malaysia’s aggregate Purchasing Managers’ Index slipped into contractionary territory.

Domestic demand will likely provide some relief, however there are pockets of concern, with regards to investment growth. Private capital expenditure especially in machinery and equipment investment, has been on a downward trend in Malaysia in light of notably slower export growth.

Residential investment will also expected to be held back by demand and supply imbalances but construction, particularly infrastructure investment, is expected to limit the downside to overall investment. Benign inflation conditions and rising real income growth will also continue to support household spending.

ICAEW economic advisor & Oxford Economics lead Asia economist Sian Fenner said looking ahead, it expects the risks to the economic outlook of Malaysia to be primarily to the downside.

“A sharper slowdown in Chinese economic growth, triggered by worsening confidence or a renewed escalation in US-China trade tensions, both affect global trade and growth across the region. That said, we do not expect the external environment to be as worrisome as it was in 2015/16, as China’s growth is also expected to stabilise in Q2,” Fenner said in a statement.

Looking at economies in South-East Asia, domestic demand will likely provide some relief, together with accommodative macro policies. Most central banks are likely to keep policy rates unchanged well into the second half of 2019 amid muted inflationary pressures. Expansionary fiscal policy will also help, with fiscal spending expected to be strong in Indonesia, Thailand and the Philippines ahead of upcoming elections in the first half of 2019.

ICAEW regional director of South-East Asia Mark Billington said although it expects domestic demand to remain resilient, the impact of increased trade tensions in the past year and slower Chinese import demand is likely to act as a drag on the region’s growth as a whole.

“The outlook for Asia trade may continue to face a challenging export environment,” said Billington.


MIDA bids to reduce services sector deficit via i-Services Portal

KUALA LUMPUR, March 21 — The Malaysian Investment Development Authority (MIDA) wants to reduce the deficit in the services sector via the i-Services Portal, a business connection platform to link the service providers and their potential clients….


Ringgit opens eight-months high against US dollar

KUALA LUMPUR: The ringgit climbed to an eight-month high today against the US dollar after the US Federal Reserves indicated it will not raise interest rates this year.

As of 9am, the local currency stood at 4.0540/0580 against the greenback compared with Wednesday’s close of 4.0650/0690.

Maybank Kim Eng research said the signal of a long pause on interest rates hikes by the US Federal Reserve has weakened the dollar as the move indicates the risks to their outlook, even as the domestic economy moves at a slower pace.

The Federal Reserve chairman Jerome Powell reportedly said that the interest rates could be on hold for “some time” as global risks weigh on the economic outlook while inflation remains muted.

Another dealer said, besides the dovish monetary stance adopted by the Fed’s, the troubled trade talk between the US and China has also put a dent on the dollar as well as yuan’s performance.

“US President Donald Trump said he’ll keep tariffs on China until he’s sure Beijing is complying with any trade deal, refuting expectations that the two nations will agree to roll back duties as part of a lasting truce to their trade tension,“ he said to Bernama.

At the local front, he said the increase in the overnight price of benchmark Brent crude to US$68.20 as of 9 am has also boosted the local note performance.

Meanwhile, the ringgit was also traded lower against a basket of other major currencies.

It decreased against the Japanese yen to 3.6618/6664 from 3.6441/6487 and slid versus the euro to 4.6329/6379 from 4.6130/6187 on Wednesday.

The ringgit however appreciated versus the British pound to 5.3574/3643 from 5.3756/3829 but dipped against the Singapore dollar to 3.0101/0149 from 3.0080/0121 yesterday. — Bernama


Dollar flattened in rush to wager on Fed rate reversal

SYDNEY, March 21 — The dollar nursed heavy losses in Asia yesterday after the Federal Reserve stunned markets by abandoning all plans to raise rates this year, a signal its three-year campaign to normalise policy might be at an end. Investors…


Asian business sentiment lingers near three-year low in Q1

SEOUL: Confidence among Asian companies held near three-year lows in the first quarter as a US-China trade dispute dragged on, pulling down a global economy that is already on a downward path, a Thomson Reuters/INSEAD survey found.

The Thomson Reuters/INSEAD Asian Business Sentiment Index tracking firms’ six-month outlook was flat in the March quarter from the previous quarter’s 63, compared with a near three-year low of 58 set in the September quarter.

A reading above 50 means optimistic respondents outnumbered pessimists, but the latest index still marks one of the five worst since the world started its recovery from the 2008-2009 global financial crisis.

“Things have not gotten worse but a lot of uncertainty is putting companies in wait-and-see mode,” Antonio Fatas, a Singapore-based economics professor at global business school INSEAD, said of US-China talks on trade relations.

“In one week, it looks like they are promising and the week after it looks like they are going nowhere, and so there’s a lot of wait-and-see attitude,” he added, saying the uncertainty is forcing companies to put off investment decisions.

A global trade war was cited as the chief business risk by respondents for the third quarter in a row, though by a smaller margin. Higher interest rates emerged as the second-biggest risk, outpacing a slowing Chinese economy.

A total of 100 companies from a range of sectors responded to the survey, conducted from March 1-15 in 11 Asia-Pacific countries where 45 percent of the world’s population live and 32% of global gross domestic product is generated.

The United States and China have put on hold a planned escalation of their trade war pending negotiations, but the much-awaited conclusion of the latest round of talks has also been delayed even though remarks from the two sides have been optimistic.

Global agencies including the International Monetary Fund and the Organisation for Economic Cooperation and Development have said failure to resolve trade tension could further slow a downward-trending global economy.

Regional powerhouses China, Japan and South Korea all saw exports fall last month, with China and South Korea suffering their worst annual declines in overseas sales in around three years.

The index staying above the neutral point of 50 suggests companies in Asia are not expecting an imminent global recession, but languishing near multi-year lows indicates companies are exerting caution.

“We don’t see a global hard landing as a likely scenario when we look at economic factors such as inflation and credit conditions,” said Young Sun Kwon, economist at Nomura in Hong Kong. “But there are big uncertainties in politics.”

Lessons from the 2008-2009 global financial meltdown have forced countries to strengthen economic defences, but factors such as Britain’s planned exit from the European Union and the US Federal Reserve’s uncertain path are posing threats.

With less than two weeks before the March 29 divorce date, British Prime Minister Theresa May’s government is still struggling to push a departure deal with the EU through the British parliament.

In the US, the Fed has declared a pause in its tightening campaign, but economists foresee at least one more increase later this year despite increasing signs of slowdown in major economies.

Respondents to the survey included Canon Inc, Suzuki Motor Corp, Thai Beverage PCL, Metropolitan Bank and Trust Co and Delta Electronics Thailand PCL. Companies surveyed can change from quarter to quarter.


Government measures fail to excite local stock market

PETALING JAYA: While the measures announced by Prime Minister Tun Dr Mahathir Mohamad at Invest Malaysia 2019 on Tuesday are long-term positive, they have failed to excite the local stock market, which saw a decline of 0.4% in the FBM KLCI in the past two days.

“The market is seemingly unenthused, with the FBM KLCI slipping 3.26 points (0.2%) on the day (Tuesday) though this could be just as much due to regional lethargy as investors keep a wary eye on central banks (US, UK, Indonesia and Thailand, among others) who are meeting this week to discuss monetary policy,” said PublicInvest Research.

Today, the key index ended 3.47 points or 0.21% lower at 1,684.21 points.

The research house noted that trade-related uncertainties between the US and China as well as issues surrounding Brexit have resulted in jittery markets for the near term.

“That said, Malaysia’s performance leaves little to be desired, the benchmark FBM KLCI being the significant underperformer (year to date) in the Asian continent,” it said in its market strategy report.

PublicInvest said that detractors will blame the domestic market’s underperformance on the new government’s inexperience or lack of economic thrust, using this as fodder for criticisms and brickbats.

“While it may partially be so, we think this more as a cup half full situation, in that there remains ample scope for a significant catch-up in performance. Reforms are underway. Results are starting to show, slowly but surely. The FBM KLCI had seen an uptick mid-February for no apparent fundamental reason apart from an improvement in sentiment,” it added.

In the short term, sentiment may still be lifted by liquidity-driven infusions into the market, gradual appreciation in crude oil prices and clarity on economic growth prospects.

PublicInvest Research said the measures announced by Mahathir are long-term positive, which reinforces its optimism in the market over the longer term.

However, expectations are short-term, with no immediate market-moving measures mentioned or tangible impacts to the investment community for now, with the exception of the government’s decision to list mature entities on the stock market and for government-linked companies (GLCs) to reduce their shareholdings in public-listed companies.

“GLCs are likely to include Khazanah Nasional, Felda and Petronas. The sheer size of GLC holdings in many entities in itself may already have some effect on markets despite efforts to contain as such, depending on the depth of asset sale,” it added.

At end-2018, PublicInvest Research suggested entry into smaller-capitalised stocks as valuations looked compelling at that point, but noted that the small cap index and stocks now look less compelling although there remains value to be found. Its end-2019 target is 1,750 points.

“We think the larger-capitalised names may now offer greater security in liquidity given current uncertain times, with valuations also relatively appealing vis-a-vis the other sub-indices which are all trading at respective long term averages,” it said.

Meanwhile, MIDF Research has maintained Malaysia’s economic growth forecast at 4.9% year-on-year for 2019, driven by the upbeat performance of domestic and external trade sectors. It reiterated its end-2019 FBM KLCI baseline target of 1,800 points.

It said that clarity in domestic policy direction will lend support to both domestic and external sectors, while the new economic direction will have significant impact on overall business confidence and investment flows.

“We foresee geopolitical events to cast a shadow on investors’ sentiment on our equity market. Nevertheless, we opine that corporate Malaysia will still see decent earnings growth,” it said in its 2019 outlook report.

The aggregate 2019 earnings estimate of the FBM KLCI constituents under MIDF Research’s coverage was shaved by 3.9% as overall corporate earnings for 2019 are expected to be lower than earlier anti-cipated, but would still deliver positive on-year growth.

“The lowered earnings target is deemed achievable as it is supported by a still healthy domestic macro picture with GDP growth expected at 4.9% this year,” it said.

MIDF Research expects Malaysia to remain on the expansionary path for the first half of 2019, with overall business performance expected to show modest improvement while private consumption and services sector are projected to expand by 7.5% and 6.2% respectively this year.


Asian business sentiment lingers mear three-year low in Q1

SEOUL: Confidence among Asian companies held near three-year lows in the first quarter as a US-China trade dispute dragged on, pulling down a global economy that is already on a downward path, a Thomson Reuters/INSEAD survey found.

The Thomson Reuters/INSEAD Asian Business Sentiment Index tracking firms’ six-month outlook was flat in the March quarter from the previous quarter’s 63, compared with a near three-year low of 58 set in the September quarter.

A reading above 50 means optimistic respondents outnumbered pessimists, but the latest index still marks one of the five worst since the world started its recovery from the 2008-2009 global financial crisis.

“Things have not gotten worse but a lot of uncertainty is putting companies in wait-and-see mode,” Antonio Fatas, a Singapore-based economics professor at global business school INSEAD, said of US-China talks on trade relations.

“In one week, it looks like they are promising and the week after it looks like they are going nowhere, and so there’s a lot of wait-and-see attitude,” he added, saying the uncertainty is forcing companies to put off investment decisions.

A global trade war was cited as the chief business risk by respondents for the third quarter in a row, though by a smaller margin. Higher interest rates emerged as the second-biggest risk, outpacing a slowing Chinese economy.

A total of 100 companies from a range of sectors responded to the survey, conducted from March 1-15 in 11 Asia-Pacific countries where 45 percent of the world’s population live and 32% of global gross domestic product is generated.

The United States and China have put on hold a planned escalation of their trade war pending negotiations, but the much-awaited conclusion of the latest round of talks has also been delayed even though remarks from the two sides have been optimistic.

Global agencies including the International Monetary Fund and the Organisation for Economic Cooperation and Development have said failure to resolve trade tension could further slow a downward-trending global economy.

Regional powerhouses China, Japan and South Korea all saw exports fall last month, with China and South Korea suffering their worst annual declines in overseas sales in around three years.

The index staying above the neutral point of 50 suggests companies in Asia are not expecting an imminent global recession, but languishing near multi-year lows indicates companies are exerting caution.

“We don’t see a global hard landing as a likely scenario when we look at economic factors such as inflation and credit conditions,” said Young Sun Kwon, economist at Nomura in Hong Kong. “But there are big uncertainties in politics.”

Lessons from the 2008-2009 global financial meltdown have forced countries to strengthen economic defences, but factors such as Britain’s planned exit from the European Union and the US Federal Reserve’s uncertain path are posing threats.

With less than two weeks before the March 29 divorce date, British Prime Minister Theresa May’s government is still struggling to push a departure deal with the EU through the British parliament.

In the US, the Fed has declared a pause in its tightening campaign, but economists foresee at least one more increase later this year despite increasing signs of slowdown in major economies.

Respondents to the survey included Canon Inc, Suzuki Motor Corp, Thai Beverage PCL, Metropolitan Bank and Trust Co and Delta Electronics Thailand PCL. Companies surveyed can change from quarter to quarter.